The Evening Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, and Echo. MONDAY, NOVEMBER 8, 1897. THE OLD AGE PENSION SCHEME.

Auckland Star, Volume XXVIII, Issue 259, 8 November 1897, Page 4

The Evening Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, and Echo.

MONDAY, NOVEMBER 8, 1897. THE OLD AGE PENSION SCHEME.

For the oauss that lacis assistance, For Uio Trcong that needs resistance, For the futuro hi the distance, And tho sood that we oan do.

The Bill introduced by the Premier to provide old age pensions for all colonists of 05 years and upwards, who have been in New Zealand for twenty years, and whose total income, exclusive of earnings or pensions, is not more than £3G yearly, goes quite as far as the circumstances of the colony warrant, or as public policy makes it expedient to go when initiating1 an experimental measure of ! this kind. Objection has been taken to the limitation of the pension to any one class. It is said that to completely remove the stigma of charity ' everybody above the specified age should receive the pension; it is also pointed out that the disqualification of persons who possess independent means amounting to £3G will lead to deception and fraud for the purpose of securing the pension. No doubt there is a certain amount of force in both objections. On the other hand, the Government scheme is not only quite as liberal as the finances of the colony can bear, but it is far more liberal than any scheme of old age pensions that has ever been brought into operation in any country, or indeed seriously suggested .

In Germany no old age pension is payable to any person who lias not contributed towards it for a period of thirty years, or who is less than seventy years of age, unless he can prove incapacity to work; in the latter case the pension may be paid at an earlier age. The contributions are based on the annual wages, and the annual wage is generally reckoned at 300 times the daily wage. There are four classes, with four average wages standards—Class 1., £15; Class 11., £35; Class 111., £3G; Class IV., £'48, The contributions have been fixed for

the first ten years at so much per week, according to the class under which the wages fall, and the whole is paid by the employer, \vho deducts half from the insured, Class I. beingrated at lid per week, Class 11. at 2d, Class 111. at 2-kl, and Class IV. at 3d: The contributions are paid by affixing' to cards stamps of. appropriate value obtained from the post office. The lowest allowance for invalidity for Class I. after rive years is £5 14s Sid per annum, and the highest for Class IV. after fifty years £20 15s 6d. Should death occur after five years' contributions have been paid the widow or children receive a refund of half the amount paid. The State subsidy was estimated at the inauguration of the scheme as £320,000 in the first year, and gradually increase to £3,450,000 in the eightieth year.

The old age peusiou proposals propounded in Great Britain which have attracted the largest amount of attention are those drawn up by a Committee, of which the Hon. J. Chamberlain was chairman, and that advocated by Mr Charles Booth. Under the first-named scheme, contributions by the pensioners formed a primary condition; the fund tiros created to be supplemented by a parliamentary g-rant and local rates. Taking- advantage of the scheme was to be optional, but no one over 50 years of age could avail himself of it, because of the provision with regard to contributions; for the same reason a very long period must elapse before any one could be benefited. The grants proposed were only from £4 to £9 a year.

Mr Charles Booth, whose statistics of England's poverty are the most valuable extant, proceeded on the principle that the aged and honest poor have already rendered service to the State entitling them to a pension—not always a safe inference, because people may be honest yet thriftless, and have frittered away resources or thrown away opportunities far exceeding those enjoyed by persons in poorer circumstances, who, by self denial, have made provision for their declining years. However, in the main, Mr Booth is undoubtedly right in maintaining' that the vast bulk of workers in England, however industrious and careful, cannot save enough to keep them when they become unfitted for work on account of increasing- infirmity. He further argues that to prevent even the semblance of charity about the pension accorded by the State to these veterans, even millionaires who arrive at the age of 05 should receive it. The amount he

suggests is 5/ per week

In the course of bis last.Financial Statement Mr Seddon showed that, according to the last census returns, there are 20,55G persons in the colony over Co years of age, and he estimated that probably 10,000 of these have been resident in New Zealand twenty years, and would therefore be entitled to claim pensions if a basis of 10s per annum, payable to all, were adopted. This would mean a cost of £260,000 a year to the State, a burden which the Premier rightly stated the colony is not in a position to bear. No doubt a portion of this expenditure would be saved through relief given to the Charitable Aid Boards, but the cost thrown upon the general taxpayer by the wants of the sick and destitute who are not entitled to pensions would still have to be met. Under the Bill which has now been introduced the amount of the pension is fixed at

£17 a year, diminished by £ 1 10s for every complete £3 of income, so that no pension shall be payable for any

year in which the income is £36 or upwards. In case of a husband and wife (unless when judicially separated), the yearly income of each is to be not less than half the total yearly income of both.

The main points in which this scheme- differs from those we have just reviewed are (il) that the pension is payable at once, and (2) that no system of contributions by the recipients is contemplated. Looking- to the future working out of a national

scheme of this magnitude, we think the absence of a clearly defined plan of finance is a defect. Money paid by the Government must come from the pockets of the people through some channel, and taxation is generally better administered when raised for a specific object, and ' increased or decreased as the requirements of the purpose for which the money is raised demand. Owing to the conditions attached, to the payment of pensions under the Government proposals, it is impossible to estimate what the claims payable under it will amount to, but if Parliament adopts the Bill, as we think it should do, experience of its operation will afford material help in framing a more comprehensive measure dealing with the whole subject.